An electric demand meter charges customers more for peak demand periods, as electricity cannot be stored. It measures the highest level of demand over a period of time and allows the company to recoup costs while maintaining affordable prices.
An electric demand meter works on the principle that customers who require a higher or more intensive level of service during peak demand times should pay more for that service to be available. This is due to the demand placed on the electricity grid to meet peak service demands. Even if that level of service is only needed for 15 minutes a day once every two weeks, when it is needed, it must be available immediately.
Electricity flows in a current. It cannot be stored. You can’t cut electricity four or five days early to have energy in reserve for peak demand. A demand meter calculates billing based on the highest level of service a residential or commercial customer might need.
A demand meter is similar to a car’s speedometer that can record speeds of 100 miles (161 km) per hour or more. Although the car’s normal driving speed, even on a motorway, will be much slower, there may be times when the car needs to go as fast as possible, such as when overtaking a slow-moving car on a two-lane highway. The speedometer is designed to handle the maximum driving speed demand of the car.
With electric service, a household or business that requires the electric grid, for example, to run a high-end, energy-intensive mainframe computer or whole-house air conditioner, even for short periods of time, would demand more capacity from the electrical grid during those peak demand periods than a household or business that does not have such energy-demanding equipment. Even businesses or homes that used the most electricity overall wouldn’t put the same type of demand on the power grid, because most electrical systems can handle a normal load of demand from their customers.
A demand meter measures the peak level of demand over a specific period of time, sometimes as little as 15 minutes, rather than measuring the overall level of electricity consumption. The electric company sets the billing level based on the electricity consumption during the peak demand period. This allows the company to recoup the cost of maintaining the ability to deliver heavy bursts of electricity to customers who need it, while maintaining affordable prices for its customers who have more substantial electricity needs or require less electricity overall .
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